NEW DELHI: India Inc is forecasting a slower growth for October-December period this year as optimism for new orders and sales prices has hit the lowest level in nearly 18 years, revealed a report by Dun and Bradstreet on Friday. The D&B Composite Business Optimism Index stood at 56.4 for December quarter this year, registering a decline of 19.5 per cent as compared to the year-ago period.
The index fell sharply indicating the severity of the slowdown in demand, said Manish Sinha, managing director – India, Dun and Bradstreet, adding several other demand indicators like vehicle sales, domestic air passenger traffic, petroleum consumption and rural wages have performed poorly. Moreover, floods in many states during the monsoon season appear to have impacted rural demand, which had been already subdued. Globally, concerns on the trade war and protectionist policies are reflected in the indices, he noted.
The Dun and Bradstreet Composite Business Optimism Index measures the pulse of the business community and serves as a benchmark for investors. It is arrived at on the basis of a quarterly survey of business expectations.“The government has taken measures to counter these economic headwinds, but our respondents are not seeing signs of revival as yet. We expect further actions in the coming months,” Sinha said.
It also noted that optimism for net profits stood at 59 per cent — a decline of seven percentage points as compared to the September quarter 2019. Optimism for new orders stood at 35 per cent — down 22 per centage points as against the previous quarter. The Nikkei Manufacturing Purchasing Managers’ Index IN PMI=ECI, compiled by IHS Markit, dropped to 50.6 in October from September’s 51.4, confounding expectations in a Reuters poll for a rise to 51.8. The new orders sub-index, a proxy for domestic demand, slumped to 51.3 from September’s 52.3, its lowest since October 2017.